Costs for delay cannot be imposed mechanically: Delhi High Court

The Delhi High Court recently ruled that a trial court cannot impose costs for delay in filing a written statement solely on the basis of a prior cautionary order, without considering subsequent developments or the merits of the explanation offered [VI- John Vs Dabur India]..Justice Tejas Karia set aside costs of ₹12 lakh imposed on VI-John Healthcare India LLP for a 48-day delay in a trademark infringement suit filed by Dabur India Limited. .“Any application filed by the parties has to be decided on its own merits… The Court should at least examine the grounds made out for delay and cannot brush it aside only on the ground that the previous order was binding,” the Court said in its order of July 31..The dispute arose from a trademark and copyright infringement suit filed by Dabur before the Commercial Court at Tis Hazari, claiming that VI-John’s packaging—particularly its use of the word “MISWAK”—infringed Dabur’s rights. The trial court issued summons to VI John on July 18, 2024. On August 7, 2024, it directed VI-John on to file its written statement within 30 days and warned that any delay would attract a cost of ₹25,000 per day.While VI-John entered appearance on time, it delayed filing its written statement citing ongoing settlement discussions, including proceedings in a parallel suit before the Saket court. The written statement was filed on October 25, 2024 along with an application seeking condonation of the 48-day delay. The application explained the circumstances for the delay and also contained records of the Saket court proceedings.Despite no serious objection from Dabur, the trial court on February 6, 2025, allowed the condonation application but imposed cost of ₹25,000 per day - amounting to ₹12 lakh - based solely on the earlier August 7 order..The High Court found the trial court’s approach legally unsustainable. It clarified that the August 7 order was precautionary and deterrent in nature and passed at a time when no delay had occurred. The trial court erred in treating that order as binding while considering a later condonation application, the High Court said.“There is no absolute bar on the learned Trial Court to consider the subsequent developments and condone the delay if justifiable grounds are made out… The First Impugned Order had no occasion to impose cost,” Justice Karia observed.Further, the Court held that settlement efforts between the parties were clearly documented in both the Tis Hazari and Saket Court records and should have weighed in favour of condoning the delay without cost. It also noted the disproportionate nature of the penalty given that Dabur’s claim in the suit was only ₹2.5 lakh..Holding the cost to be excessive and unjustified, the Court allowed VI-John’s petition under Article 227 of the Constitution. It directed that the delay be condoned without payment of any costs and ordered that the written statement be taken on record.“The delay in filing of the Written Statement is only 48 days and well within the outer limit of 120 days as prescribed… The reason for delay… was justified. However, the same was entirely ignored,” the Court concluded..VI-John was represented by advocates Neeraj Grover, Harshita Chawla, Angad Deep Singh and Mohona Sarkar..Dabur was represented by Advocates Mohd. Sazid Rayeen and Avijit Sharma..[Read Judgment]